UK Announces Preferred Bidders for Nationwide Smart Meter Rollout

The United Kingdom’s Department of Energy and Climate Change (DECC) has selected four preferred bidders—Capita, CGI, Arqiva (News - Alert) and Telefónica— to implement the nation’s smart meter initiative. Between 2015 and 2020, the UK plans to install smart meters at 53 million consumer and commercial endpoints nationwide at a projected cost of £11.5 billion (US$17.8 billion).

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Subject to contract, London-based Capita, a business process outsourcing provider, has been named as the Data and Communications Company (DCC) licensee for the smart grid scheme. According to DECC, Capita will "provide a two-way communications channel between smart meters and a central communications hub to which smart meter data users—energy suppliers, network companies and other authorized third parties—will have access for specified purposes.” The DCC contract is worth an estimated £175 million (US$271 million) over 12 years.

Capita Plc CEO Paul Pindar commented, “Smart metering will be the biggest step change in the retail energy sector since the industry was privatized, more than 25 years ago. It will provide clear benefits for consumers; allowing them to better manage energy consumption and, therefore, cost. It will make it easier to switch suppliers, benefiting the most competitive energy companies, and will support the government’s drive to reduce the UK’s over-reliance on expensive, imported and dwindling supplies of fossil fuel. Managing the national rollout program is a huge logistical and technical challenge but Capita’s scale and pedigree in achieving large transformation projects will help to ensure that this program meets its milestones in a cost efficient manner.”

Photo courtesy of UK Office of Gas and Electricity Markets (Ofgem).

CGI (News - Alert), an IT services company with headquarters in Quebec, Canada, has been named preferred bidder for the Data Service Provider contract, worth an estimated £75 million (US$116 million) over eight years. In that position, it will be CGI’s responsibility to develop and operate the solution that will link gas and electricity meters with the business systems of utility companies. CGI will design, build, run, host and support DCC Data Services.

Tara McGeehan, head of CGI’s UK Smart Energy sector said, “Britain’s Smart Metering Implementation Program is recognized as the most ambitious of its type globally. The success of the program is crucial, if Britain is to keep energy bills affordable, continue to benefit from the levels of reliable supply we do today, meet our carbon reduction targets, continue to be an attractive place to invest and provide consumers with meaningful choices about how they satisfy their energy needs.”

Three Telecommunications Contracts

There are three telecommunications contracts on offer—one for the North of England and Scotland; one for the Midlands, East Anglia and Wales; and another for the South of England.

Winchester, England-based Arqiva, the company that operates the UK's TV broadcast infrastructure, has been named the preferred bidder for the Northern contract, worth an estimated £625 million (US$968 million) over 15 years.

On receiving the news, John Cresswell, CEO of Arqiva, stated, "The choice of Arqiva as the preferred bidder to provide the smart metering communications service in the North reflects the proven technical superiority of our solution. We are pleased to be working with the both the industry and government to create a new smart network to meet the needs of today's consumers in the North."

In conjunction with Arqiva, Raleigh, North Carolina-based Sensus announced that it will provide the long-range radio technology for a private, secure and resilient communications network in the North. Sensus President and CEO Peter Mainz commented, “The selection validates that our technology has no borders. Further, it provides financial and energy savings for utilities and consumers by improving operational efficiency and enabling the public to make informed choices on their energy use.”

Word has circulated that the other two telecommunications contracts will go to Madrid-based mobile operator Telefónica. Between them, these are worth an estimated £1.5 billion (US$2.3 billion) over 15 years—which would make Telefónica the big winner in this smart meter rollout.

According to the publication Information Age, companies that had been in the running, but came away empty- handed, include G4S, Vodafone (News - Alert), BT and SAP.

Earlier this year, the government pushed back its target for completion for the smart meter roll-out by a year, to 2020. The project will start in 2015, rather than next summer as originally planned.